Cisco is closing the year with yet another acquisition that demonstrates its big bet on the impacts of global IP traffic growth. Cisco is buying BroadHop, a provider of next-generation policy control and service management technology for carrier networks, for an undisclosed amount.

With traffic projected to increase threefold over the next five years alone -- and that's after increasing eightfold over the past five years -- Cisco is convinced that policy control and services creation at large scale has never been more vital for mobile and fixed communications service providers.

"BroadHop's widely deployed policy control solutions for mobile and fixed networks will be integrated into Cisco's Service Provider Mobility Group to provide service providers the flexibility to control, monetize and personalize the types of service they choose, on any network," said Hilton Romanski, vice president and head of corporate business development at Cisco.

All About Monetization

How does this benefit customers and end-users directly? Service providers can integrate BroadHop technology to make it possible for consumers to buy customized premium service packages, Romanski said. He offers an example: If a consumer wants premium on-demand streaming, BroadHop technology empowers the service provider to add value to and monetize this particular service.

"Cisco's acquisition of BroadHop is also an evolutionary step in supporting Cisco's Open Network Environment for extensible network programmability," Romanski said. "This policy infrastructure represents the baseline to monetization of the network and will enable Cisco to develop software services that empower network operators to deliver revenue-generating services, while enhancing the end-user experience."

Cultivating Top Talent

Zeus Kerravala, principal analyst at ZK Research, said this is a good buy for Cisco and he expects the networking giant to continue making acquisitions in the network management sector.

"The introduction of app stores has disintermediated carriers from the value chain. They provide the network that lets consumers go directly to an app store to buy apps," Kerravala told us. "But BroadHop lets carriers apply certain policies to attach themselves to some of those apps to provide better services.

"If a consumer downloads a streaming app, the service provider for an extra fee could charge to deliver a better quality of service. This acquisition will help Cisco help their customers, i.e. service providers, provide more value and better service to consumers."

Cisco and BroadHop are no strangers. The company has been a key service provider Wi-Fi partner for Cisco. Romanski said the acquisition is a natural extension of Cisco's collaboration and reinforces the firm's commitment to service providers.

"The BroadHop acquisition is well-aligned to Cisco's goals of developing and delivering innovative network and software technologies while also cultivating top talent," he said.

The BroadHop team will be integrated into Cisco's Service Provider Networking Group, reporting to Shailesh Shukla, vice president and general manager of the company's Software and Applications Group.